Skip to main content

Fuel Costs

Volume 543: debated on Thursday 19 April 2012

I have regular meetings with ministerial colleagues on a range of economic issues. The Government are very aware of the impact that high fuel prices have on people who rely on their cars. In the Budget last year, the Chancellor cut fuel duty by 1p per litre and it is now 10p per litre lower than it would have been under the previous Government’s plans. Between 2011 and 2013, as a result of that change, the Government will put £4.5 billion back into the pockets of motorists.

I should say that I thank the Secretary of State for that answer, but the problem is that the tax on fuel is not just the excise. There is also a thing called VAT which has not been taken into account in the equation. In her regular meetings with the Chancellor, will the Secretary of State suggest to him that they change the formula for the price of fuel, given that VAT plays a fairly significant part in that and the problem is now at a critical stage in my constituency? People are writing to me to say that they can no longer travel to work and that they are considering giving up their employment.

We want motoring to remain affordable and, in fact, this Government are working very hard to ensure that that remains the case. We must also ensure that we take the decisions that can get our public finances back into order. We must do that if we are to continue to be able to invest in infrastructure such as transport. One needs only to come to Transport questions to see how important the issue is to many constituencies and communities, so I can assure the hon. Gentleman that we are trying to strike the right balance. We have taken action as a Government and will continue to review the situation.

Will my right hon. Friend put pressure on the big oil companies to reduce prices at the pump when the international oil price falls? Will she also do everything she can to increase competition and reduce the stranglehold of the four big oil companies on the smaller independent petrol retailers?

We want to see competition in this arena and we also want to ensure that when our Government puts through fuel duty cuts, as we did last year, they get passed on. The evidence shows that they do, but I believe that my hon. Friend is right to highlight the situation, which we should continue to monitor. I can only reiterate to him—I know that he has campaigned hard and successfully on this in the past—that we will do whatever we can to try to ensure that motoring remains affordable.

19. At a time when record petrol prices are hitting families and businesses very hard, does the Secretary of State at least agree that it would definitely help those struggling businesses and families if the Government reduced VAT on fuel to what it was before the Government increased it to 20%? (103782)

As I think the hon. Gentleman will know, it is not possible to reduce VAT on fuel without reducing it on standard rated items across the board. I hope that he will welcome the steps we have taken in his local area to make it more affordable for people to travel over the Humber bridge, but his proposition that we can reduce VAT on fuel without reducing it on everything else is wrong. If we did, we would have a huge hole in our public finances that would undermine our investment for public services.

Is the Transport Secretary aware that Ryedale has the highest fuel pump prices in the country and that filling up the car costs more than the weekly grocery bill? Will she support my campaign for a rural fuel duty discount for the specific parts of Ryedale and Hambleton that are affected by the high cost of tax on fuel?

I want to ensure that motoring is affordable for everybody. I think my hon. Friend’s question perhaps relates more to Treasury questions than to Transport questions and I know that my right hon. Friend the Chancellor has introduced and put in place plans to pilot such a rural fuel duty discount. I am sure that she will make her case to him on whether it could, in time, be extended to her community, too.